Saturday, May 18, 2013

Reflections on owning a car for 1 yr

Having owned a pre-loved car for slightly more than a year, I wanted to reflect on whether it's a good way to burn the money and also to gauge what's the real cost of owning a car. I did some calculation before buying, now it's time to check back those assumptions and verify it once and for all whether those assumptions are rubbish or not

*Items that are estimated means that I take the amount spent for 1 yr and divide it by 12 to get an estimated monthly charge

One time expenses:
First car inspection before taking the car: $142
Downpayment: $16,000
Major car servicing: $560

Total one time payment: $16,702

Monthly expenses:
Season parking : $65
Fuel : $260 (estimated)
Cashcard: $50 (estimated)
Insurance: $120
Carpark Coupon: $4 (estimated)
Car wash: $5 (estimated)
Monthly installment: $359

Total monthly payment: $863

Even before the new rules set in, I'm already paying 50% down payment and borrowing the rest. I've the money to pay it all down but I just don't think it's wise. Anyway, the total interest is $1.2k over 4 yrs, so I think it's alright to borrow money since it raises my liquidity, which is more impt for me. My wife and I are sharing the cost, so it works out to be half of whatever is calculated on top.

My share of the one time payment is $8,400
My share of the monthly payment is $430

Is it affordable? I think so. A lot of people who say that they can't pay for a car is because they didn't look at the secondary market. If you need to smell the fresh leather seats of new car, then don't complain that the cost of owning a car is so high.

Anyway, these are the cost. In accounting, there's got to be something to balance the cost. Here's the benefits:

1. Less energy wasted taking public transport and walking

This reason alone is good enough to make me want to own a car. After work, I still have the energy to go to other places. It's like everyday I start off with 100% energy, then as I work, travel, walk...I spent those energy. Having a car conserve my energy level and spend it slower than walk & public transport. I'm not spoilt or anything (most of the time, my wife drives instead of me) but having a car will make the journey much less taxing on my energy reserves. It makes me more energetic once I reached my destination, rather than tired and sweaty and generally worn out.

2. Saves time

I used to take several buses that will reach my destination in 15 mins but with the waiting time added in, I've to go 35 mins ahead. The extra 20 mins goes like this: 15 mins for waiting, another 5 more in case the bus is too full or 2 buses come at the same time or the bus arrives earlier than expected. It's a tremendous waste of my time. When you value your time and energy more than money, you know that that's the time to get your own transport.

3. Ability to go several places in one day

I've not had that experience before, since my family don't ever own a car. I could be in one place having lunch, then vroom to another place to get something, then vroom to yet another place for dinner. Just because I can do so. The kind of freedom that it gives me is worth the money. I wished I had bought it sooner, actually.

The benefits do not have a dollar value, but that doesn't mean that it's not important. The cost has a price to it, but the benefits are literally and metaphorically priceless.


Createwealth8888 said...

Car is your productivity tool unlike some office workers most of the time they drive their car to park at office and drive back to park at home.

la papillion said...

Hi bro8888,

Indeed. Might be better off with a week end car...even cheaper.

Patrick T. said...

Err... buying a weekend car to park at home would be even worse isn't it? :)

RetireSG said...

Hi Papillion,

This is another thing we have in common, I too bought a pre-loved car some time around June last year. The insurance + road tax = 5k+ already. No NCB discount because I used to drive the family car. However, I'm still not to sure whether the cost is a good tradeoff for the benefits I have gained. One of the biggest reasons why I'm still holding on to it is because my wife uses the argument of "When I get pregnant or when your child is born, you want to risk people bumping into us on public transport?" Conversation ended. Yes means no concern, no means keep car. How man.

la papillion said...

Hi Pat,

Haha, sometimes people look at the absolute cost of owning a car...then a weekend car is better in that sense. It's absolutely useless for me to own a weekend car though, so it's something I would never do.


I don't have NCD discount too since my family don't even own a car. You have to soul search and find out for yourself if spending the money to own a car is a good deal. For me, it's extremely good. I don't represent all others, of course.

B said...


I feel like owning a car in Singapore friends and relatives are taking advantage of you.

At least for my relatives who drive, we would ask her for a ride everytime we are going to a dinner together :)

la papillion said...

Hi B,

I think if I own a car, I wouldn't mind giving others a ride. It's a good gesture :)

Ivo Beutler@AutoParkNiagara said...

I can't help but agree with you regarding people who complain about the costs of owning a new car. There are plenty of great deals for used cars out there. The key is finding an honest dealer who will provide the history of the car so you can figure out what your best option is. Being responsible about maintenance and repairs is also important so you don't end up with huge bills because of neglected issues.

YJ72 said...

We should add in the car value depreciation/mth to the monthly cost. This will add significantly to the monthly payment.

la papillion said...

Hi yj72,

Depreciation is not a cash item that you need to pay to someone monthly. May I know what's the rationale for including that in the monthly payment?

Unless u are including depreciation per month to put aside as savings for the next car?

la papillion said...
This comment has been removed by the author.
Vera said...

This is cool!